Money Machine - Profit Improvement - Russell Colbourne

Russell Colbourne : Your Money Machine

IBGR.Network - PROFIT Radio. Everything a business owner needs to start, grow or exit a business. GROW WITH US.

INTRODUCTION
Your business is Your Money Machine.  In this Show – I’ll take you under the hood of your enterprise and show you how to fine tune your business.  Get ready for lift off as we add rocket fuel to your profitability!  This show is focused on businesses that have launched and are preparing for exponential growth.

Are you sure you’re ready for exponential growth?  Getting your mindset right to transition from business owner to CEO.  Are you prepared to give up some control and trust others to help you build?  As well as ensuring all your systems and standard operating procedures have been documented and are in place, you will need to ensure your financial reporting provides you with the feedback you need to run your business. 

There are only four ways you can improve your profits: sell more, get customers to buy more frequently, increase prices and reduce costs. If you can do all four at once, your profits will increase dramatically. Even changing one of these four factors will boost your profits. 

What You Need to Know - The What

• The main reasons for low profits
• The ratios that can help unlock increased profits
• Increasing sales volumes
• Selling more frequently
• Increasing prices without reducing sales volumes
• Identifying and finding ways to reduce costs
• How a part-time CFO will help you to boost your profits The three key financial statements you need

​

What You Need to Do - The How

There are many activities that sit behind each of the 12 boxes and the list below is not exhaustive, but merely gives some examples of what a business owner needs to consider in the area of Profit Improvement:

• Identify the ways in which you can sell more, sell more frequently, increase prices (without losing customers) and cut costs; 
• Identify the profit drivers in the company, both financial and non-financial; 
• Educate the senior team about the importance of Critical Success Factors (CSFs). 
• Systematically analyse relevant KPIs and trends to identify potential hazards before they become a problem; 
• Review arrangements with the company’s main customers to see if there is a more profitable way to supply them; 
• Review pricing arrangements with existing suppliers; 
• Research alternative suppliers across all areas of the business; 
• Research sources of grant funding; 
• Determine company’s eligibility for government funded incentive schemes that encourage research and development; 
• Develop effective incentive schemes for staff to encourage productivity and to manage risk; 
• Prepare customer surveys to understand what the market really wants; 
• Analyse competitors to find out what is working well and what isn’t and course correct accordingly; 
• Review significant overheads and isolate opportunities to reduce expenditure;
• Investigate exchange rate hedging and planning; 
• Create a realistic and achievable action plan then communicate it to all employees;
• Increase prices; 
• Explore online selling; 
• Explore more cost-effective ways of marketing by forming strategic alliances and joint ventures with companies that deal with the business’s prospective clients; 
• Arrange for business mentors to give advice and share experiences with the client;
• Review organisational structure and delegation procedures to maximise efficiency; 
• Develop customer retention strategies to prevent loss of revenue; 
• Evaluate business location and determine possible alternatives (to save costs on production, delivery, etc.); 
• Outsource some functions, employ some people on a part-time rather than full-time basis; 
• Look at the viability of redundancies; 
• Introduce an expense control programme; 
• Review bank charges; 
• Check invoices from suppliers for overcharging; 
• Get rid of inefficient systems; 
• Measure the return on all advertising;
• Replace frequent small orders with bulk buy discount orders. 

Shows 

• Previous: Episode 7 – Reporting
• Next: Episode 9 – Cash Flow Management

 
Written by Russell Colbourne, FCCA, GAICD
Your Money Machine

Russell is a CFO and Entrepreneur who has worked across a diverse range of industries over the past 25 years.  After a short service commission as a pilot flying Seaking Helicopters in the British Royal Navy, Russell studied business and qualified as a Chartered Certified Accountant (ACCA) in the UK. Since then he has been integral with the start-up of many successful companies and operations within larger organisations.  He has bought, sold and spun off business operations in the UK, Australia and the US. 

In 1994 Russell joined Sir Richard Branson’s Virgin Atlantic Airlines where he was responsible for a number of innovative services that were, at the time, ground breaking and helped revolutionise air transport.  From launching the world’s first limo boat on the River Thames to developing the world’s first handheld check-in device and implementing drive through check-in booths around the world, Russell has helped the Virgin Group deliver unparalleled customer service. In 2000 Russell was the first of the Virgin team to arrive in Australia to start a new low cost Airline, and within 8 months had built a team operating flights between Sydney, Brisbane and Melbourne.

Russell now works as a Part Time CFO for a number of SME businesses in South Australia.  He is a Director of a health and wellbeing business; a crowdfunding website for educational costs and of the Founder Institute program in Adelaide where he lives with his wife and 3 teenage sons.

F2.08.4AA